Casey, Legislators Wrangle Over `Rainy Day' Funds

So far, no one has brought it up. But rainfall has been pretty heavy of late.

Over the next 10 days, Pennsylvania's government leaders must decide whether it's rainy enough to justify tapping the state's virgin Rainy Day Fund.

And while they're at it, the state's 253 legislators will have to decide whether to deplete a comfy little "rainy day" fund of their own.

Pennsylvania established its Rainy Day Fund -- technically known as the Tax Stabilization Reserve Fund -- in 1985.

The fund, which stands at $126 million, is set aside for "periods of economic distress," to fend off burdensome tax increases or cuts in "vital public programs."

No withdrawals have ever been made.

But the Republicans who control the state Senate have been admonishing Gov. Robert P. Casey to tap into the fund now, to supplement the thin spending increases shaping up in next year's budget.

Casey has steadfastly refused, saying the current economic downturn is not enough to justify such a move.

The issue may boil down to whether or not Casey's fellow Democrats, who control the House of Representatives, agree.

Interviews this week indicate that many do not.

"It's one thing to say you're trying to run the state like a family runs its budget," said Rep. Frank Yandrisevits of Northampton, D-138th District.

"But the average family doesn't tighten their belt to the point of starvation when they have money in the bank," he said.

Casey is proposing a narrow 2.8 percent spending increase in his 1990-91 budget. Many legislators predict the increase will be even less when the July 1-June 30 budget finally is adopted.

The debate over the second "rainy day" fund could be even more contentious than the first.

To help balance his budget, Casey has asked the Legislature to give up $52 million from a $94 million surplus in its own accounts.

House and Senate leaders say the surplus is needed to protect against political blackmail.

Two years ago, when Casey and Senate Republicans were feuding over a budget, Casey cut all their funding in an effort to make them see things his way.

Without the money, the Senate could not pay its employees or other day-to-day expenses.

With that memory fresh in their minds, some legislators say they don't want to give Casey much, if any, from their own "rainy day" fund.

"The position I've taken is we should have enough money on hand to run the Legislature for one year," said House Minority Leader Matthew Ryan of Delaware County, R-168th District.

That would leave about $14 or $15 million for Casey, Ryan said -- well short of the $52.5 million the governor is requesting.

"What he (Casey) did was outrageous," said Ryan. "He shouldn't be surprised that we feel this way."

Republicans aren't the only ones who think the Legislature should keep some cushion.

"I think it's going to be incumbent upon us to advance some of that money," said Rep. John Pressmann of Allentown, D-132nd District. "But there is some concern, within all four caucuses, that we could lose some of the independence from the executive branch we enjoy now."

Several legislators said they link the two proposals.

"Basically what you're looking at is two Rainy Day funds," said Yandrisevits. "If the governor wants us to tap into what we have set aside, than I think the Legislature is going to be looking to the governor to tap into the funds he has under control."

Casey's people see it differently.

"We think it's proper they have some surplus, but you're talking a lot of money that's now in a bank account that could be used for programs," said Rod Snyder, Casey's budget press secretary.

Casey must initiate any use of the Rainy Day Fund. He needs the approval of two-thirds of the Legislature to do it.

The Pennsylvania Economy League has supported Casey in his refusal to tap the Rainy Day fund.

"If the Legislature wishes to appropriate more money than the governor has proposed, it should raise taxes or find other fiscally prudent ways to pay for it," the League wrote in a recent newsletter.

Casey not only is proposing not to tap his Rainy Day fund, he wants to put more money into it next year -- $25 million, transfered from the State Workmen's Insurance Fund.

Legislators also will have to approve or reject that transfer in the coming days.

Incidentally, in May, the last month fully recorded, the Lehigh Valley absorbed 6.66 inches of rain - 3.09 inches more than normal, according to Bill Dovico, a National Weather Service meteorologist.